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What the “full expensing” write-off deduction means for business

11 December 2020

The Federal Budget measure of allowing businesses to fully write-off eligible assets is a boon to Australian businesses, even though the measure is temporary. Just to recap, businesses with aggregated annual turnover of less than $5 billion will be able to deduct the full cost of eligible capital assets acquired from 7:30pm AEDT on 6 October 2020 (Budget night) and first used or installed by 30 June 2022.

“Full expensing” in the year of first use will apply to new depreciable assets and the cost of improvements to existing eligible assets. For small- and medium-sized businesses (with aggregated annual turnover of less than $50 million), full expensing also applies to second-hand assets.

Continue reading “What the “full expensing” write-off deduction means for business” →

COVID-19 Lockdown

19 November 2020

During the current COVID-19 lockdown our office will be closed, however, we are still available should you need to contact us.

We will all be working from home and available via email and mobile phone and we can arrange a meeting by Zoom if required.

With the current lockdown there are a couple of key issues to consider:

JobKeeper 2.0 – the eligibility for JobKeeper for the January to March 2021 period is based on your income for the current quarter. Therefore should the lockdown result in your turnover for the quarter ended 31 December 2020 being 30% below the turnover for the December 2019 quarter you will be able to claim JobKeeper for your employees from January to March 2021.

Staff Wages – we have sought specialist advice for our clients from Strategic Employee Relations in relation to employer’s obligations to payment of staff who are unable to work due to the lockdown. Click on this link to view their Guidance Notes for your reference.

Should you require any assistance during this time, please do not hesitate to contact us via email at admin@nulli2advisory.com.au.  However, most importantly, stay safe and hopefully, the lockdown only lasts for a short term.

Kind Regards
i2 Advisory

What can you do with your employees if you are required to temporarily shut your business as a result of a government lockdown?

19 November 2020

 

 

 

 

Employers may be faced with a situation where they are required to temporarily shut their business as a result of a State or Federal Government lockdown to combat COIVD-19.

An employer is highly likely to be able to “stand down” their employees “without pay” if a temporary lockdown does occur.

What is a stand down?

Employers have the ability to unilaterally stand down employees without pay if they cannot be usefully employed due to “a stoppage of work for any reason the employer cannot reasonably be held responsible” such as a Government lockdown.

A stand down means that an employer does not have to make an employee redundant but rather “pauses” their employment.

Contracts of employment, modern awards or enterprise agreements may contain different stand down provisions so it is important to check these instruments before implementing a stand down.

Process to implement a stand down

The below outlines a recommended process to implement a stand down:

Step 1: Check any contract of employment, applicable modern award or enterprise agreement for specific stand down provisions;

Step 2: Draft a stand down letter;

Step 3: Meet and provide an employee with the stand down letter. Explore ways to mitigate the impacts such as taking annual leave, annual leave at half pay, long service, banked TOIL or RDOs;

Step 4: Keep in touch with the employee on stand down to check on their welfare and bring them back to work when they can be usefully employed;

How long can a stand down last?

There is no time limit on a stand down and advice should be sought if a stand down becomes prolonged;

Further questions?
Every situation is different and the above is provided as general guidance. Please do not hesitate to contact Zev Costi on 0433 876 233 or at zev@nullstrategicemployeerelations.com.au if you have any questions.

Strategic Employee Relations Pty Ltd (ABN 70 625 206 680)

SA State Budget Summary 2020/21

16 November 2020

With many calling this budget as one that would define future generations, South Australian Treasurer Rob Lucas had a big task in drafting a budget to get South Australia’s economy back and firing with the aim to work towards stability in the jobs sector.

A year struck down by bushfires and the pandemic meant there were many areas requiring a significant boost and in some cases, prolonged assistance. For a Government that is often talking about curbing spending and pushing towards surplus, it was a very different budget indeed. So much so that Rob Lucas quipped during his budget speech ‘Now I know the joys of retail therapy….it makes you feel good when you’re spending other people’s money’.

Continue reading “SA State Budget Summary 2020/21” →

Individual or corporate trustee for your SMSF?

14 November 2020

When establishing a self managed superannuation fund (SMSF), one central decision to be made early on is if the trustee structure is to consist of individual trustees or a corporate trustee. Between these choices, you can have up to four individual trustees, or one company that acts as trustee (with that incorporated body having up to four directors).

There are differences between these two structures, which can matter depending on your circumstances and outlook on effective retirement savings. The decisions to be made when choosing between the two choices relate to member/trustee requirements, some costs, how assets are to be owned, possibly penalties, and ultimately any succession considerations.

Continue reading “Individual or corporate trustee for your SMSF?” →

The realities of insuring against cyber crime

17 October 2020

Think your business is too small or that your data and information isn’t important enough to be targeted by hackers? Think again.

Much of our communication, be it personal or businesses-related, has increasingly moved online in the last two decades, and continues to do so, especially in these recent times of COVID-19 with nearly everyone doing business exclusively online. Every day, thousands of pieces of information are transmitted via email, text, Messenger, WhatsApp, LinkedIn, social media and so on.

Yet while we’ve launched with a vengeance into the online world, whether by choice or of COVID-necessity, how many of us have kept pace with adequate cyber protections and insurances? Every day, we see individuals and businesses being targeted by cyber criminals. And it’s not just the big end of town in the crosshairs — plenty of smaller practices fall victim to cyber crime.

Cyber insurance can be regarded as business-critical insurance because statistics show that the likelihood of a claim occurring within a cyber insurance policy is now as high, if not higher, than making a claim against your business insurance or PI insurance.

Yet not all insurance policies are the same, and so businesses need to understand exactly what they are and are not covered for. At a minimum, a cyber policy should provide a 24/7 breach response service (including IT forensic services), breach response management, credit monitoring, public relations crisis management, civil and regulatory defence costs and penalties, cyber extortion costs, business interruption cover and cyber terrorism.

Continue reading “The realities of insuring against cyber crime” →

JobKeeper Extension – Am I eligible?

29 September 2020

The first round of the JobKeeper subsidy ended on 27 September 2020. For those that have been eligible to receive it, it has been a welcome boost to help businesses through what has been an uncertain time.

However – where to now?

With the extension of the JobKeeper rules passed into legislation (colloquially dubbed “JobKeeper 2.0”), businesses need to consider their eligibility under these new rules. This includes businesses who were previously ineligible that may now be eligible, as well as those businesses who have been receiving JobKeeper payments to date.

JobKeeper 2.0 vs JobKeeper 1.0

What remains the same?

  • Access for businesses, not for profits, eligible business participants and religious institutions/practitioners
  • Decline in turnover percentage thresholds (i.e. 15%, 30% or 50%)
  • The need to satisfy wage condition rules
  • Monthly reporting of turnover to the ATO
  • Integrity rules
  • The meaning of eligible employee and eligible business participant
  • The rule preventing more than one  employer claiming in respect of the same employee
  • The enrolment process

What changes?

  • The test periods and method of calculation
  • Modifications to the ‘Decline in Turnover Test’
  • Tiered rates of payments
    • 28 September 2020 to 3 January 2021 (Extension 1)
      • Tier 1 = $1,200 per fortnight
      • Tier 2 = $750 per fortnight
    • 4 January 2021 to 28 March 2021 (Extension 2)
      • Tier 1 = $1,000 per fortnight
      • Tier 2 = $650 per fortnight
    • ‘Tier 1’ applies to eligible employees who worked 80 or more hours in the 4 weeks of the pay periods before 1 March 2020 or 1 July 2020 OR eligible business participants who worked 80 or more hours in the 4 weeks of the pay periods before 1 March 2020
    • ‘Tier 2’ applies to all other eligible employees and eligible business participants

What do I need to do?

  • Assess eligibility – are you still (or now) eligible? You will need to enrol if you are eligible.
  • Does your business meet the relevant decline in turnover test for the September Quarter?
  • Determine eligible employees and the payment ‘Tier level’ they are eligible for based on their reference period
  • You have until 31 October 2020 to meet the wage condition (i.e. top-up employees if required) for fortnights ending in October for eligible employees – see Fig 1
  • If eligible, you will need to ensure the monthly declarations are lodged with the ATO before the 14th day after the end of each month to receive your payment

What do I need to do in my payroll software?

  • Identify the eligible employees and enrol them as JobKeeper participants (only if new to the JobKeeper scheme)
  • Assign a Tier 1 or Tier 2 payment rate to each eligible employee
  • For more guidance click your accounting software link below
  • For those businesses no longer eligible for JobKeeper payments or for individual employees which may no longer be eligible under the JobKeeper extension, you will need to process this in your relevant software by ‘stopping’ JobKeeper payments
  • Without doing the above as it applies, Single Touch Payroll filing may be rejected

Fig 1 – JobKeeper Fortnight Calendar

We are happy to assist with any of the above from assessing your eligibility as an employer and identifying the eligible employees and/or business participants that you can receive payments for.

If we can assist with the above or any other matters, please do not hesitate to contact us at admin@nulli2advisory.com.au or 08 8132 6400.
DISCLAIMER: This summary is for general use only and should not be relied upon or taken to constitute advice. Further, it is based on available information which is subject to change.

COVID-19 and residential rental property claims

30 August 2020

Many residential rental property owners have had their rental income affected by COVID-19. As a result of this income year not being business as usual, the ATO has provided answers to some typical scenarios that may crop up in this area for tax time.

Q: If tenants are not paying their full rent of have temporarily stopped paying rent as their income has been affected due to COVID-19, can a property owner still claim deductions on their rental property expenses?

A: Yes. If tenants are not meeting their payment obligations under the lease agreement due to COVID-19 and you continue to incur normal expenses on your property, then you will still be able to claim these expenses in your tax return.

Continue reading “COVID-19 and residential rental property claims” →

JobKeeper Update – Change to Eligible Employee Start Date

18 August 2020

It was much quicker than we anticipated, but the ATO have now released guidance on changes to the current JobKeeper program relating to ‘employee eligible dates’ which needs urgent consideration from employers.

From the 3rd of August, the reference date for an employee’s eligibility to JobKeeper payments changes from 1st of March to 1st of July 2020. Employers now need to consider the eligibility of employees who were employed at 1st July 2020.

There is no change for existing employees who were already eligible for the JobKeeper program, nor is there any change to an employer’s existing eligibility to the JobKeeper program.

Which employees may now be eligible?

For the JobKeeper fortnight beginning 3rd August 2020, there are a number of employees who may now be eligible as at the 1st July 2020 including;

  • New staff who started after 1st March 2020
  • Casuals who have, since 1st March 2020, met the definition of long term casual employees
  • Employees who were not eligible due to their age
  • Employees who may hold an eligible visa

Other circumstances to review and consider 

  • Employees who may have nominated for JobKeeper with another employer, under limited circumstances can re-nominate with a new employer as long as they have ceased their employment with the original employer between 1st March 2020 and 1st July 2020
  • An employer who was previously ineligible for JobKeeper, still has the ability to test their JobKeeper eligibility in the months of August and September. Eligible employees may include employees who started prior to 1st July 2020

Action Items 

  • Review your existing employees and business participants who were not previously eligible for JobKeeper to determine if they are now eligible
  • Provide those employees with an employee nomination form ASAP. The ATO has updated this form and you can find it here
  • Calculate any shortfalls required for employees whose pay is required to be ‘topped up’ to $1,500 per fortnight. Note: the full time and part-time rates only apply for JobKeeper 2.0 which begins 28th September 2020
  • Payment of any top up is required by 31st August 2020 in respect of the JobKeeper fortnights 3rd August – 16th August 2020 and 17th August – 30th August 2020

‘One in – All in’ principle still applies 

  • Remember the ‘One in – All in’ principle continues to apply
  • If you are already a participant in JobKeeper you need to provide employee nomination forms to those employees who may now be eligible
  • You do not have discretion to exclude employees

If we can assist with the above or any other matters, please do not hesitate to contact us at admin@nulli2advisory.com.au or 08 8132 6400.

COVID-19 – JobKeeper program update

14 August 2020

JobKeeper 1.0 Reminder

For those currently registered in the JobKeeper program

For the month of August 2020 please be mindful that there are 3 fortnights for the purposes of the JobKeeper program. What does this mean?

For the month of August, eligible employees are required to each be paid at least $1,500 in each of the 3 fortnights that fall in the month of August (a total of at least $4,500 Gross Wages).

Please see below the JobKeeper fortnights affecting the month of August through to the end of September under the original JobKeeper program.

JobKeeper fortnights (up until 27 September)

For those not currently registered in the JobKeeper program

To claim JobKeeper payments for the August JobKeeper fortnights, you must enrol for JobKeeper and identify your eligible employees by 31 August 2020.

If you require assistance assessing your eligibility to these payments and and/or your business has become eligible for the month of August, please contact this office.

JobKeeper 2.0 Update

There are many questions regarding the ins and outs of JobKeeper 2.0. We are awaiting further commentary from the Australian Taxation Office (“ATO”) with parliament due to next meet on the 24 August 2020 to discuss this further. Hopefully we will see further information in the coming weeks.

Further changes were announced on 7 August 2020 to adjust the reference date for an employee’s eligibility and make it easier for organisations to access JobKeeper payments in light of the further restrictions in Victoria. From 3 August 2020, the relevant date for employment will move from 1 March to 1 July 2020.

Some of the implications of these changes are;

  • If you have had new staff which started after 1st March 2020 but prior 1st July 2020, who were ineligible for the original JobKeeper 1.0, may now be eligible for JobKeeper;
  • If you have long-term casuals whose 12 month anniversary of employment fell between 1st March 2020 and 1st July 2020 may now be eligible for JobKeeper;

The ATO have yet to release guidance regarding these points and the implications for our clients.

At this early stage we recommend clients;

  • Collate details of their employees, who were not previously eligible at 1st March 2020, for eligibility as at 1st July 2020;
  • Collate employees hours of work in the four weeks prior to 1st March 2020 and 1st July 2020;
  • In mid to late September 2020 we encourage clients have their books up to date. It maybe a tight turnaround between determining eligibility, enrolment and paying employees, as the first JobKeeper fortnight under JobKeeper 2.0 starts 28th September 2020.

A very useful infographic, which we would recommend reviewing, of the extended JobKeeper program can be found on the Chartered Accountants website here.

If we can assist with the above or any other matters, please do not consider to contact us at admin@nulli2advisory.com.au or 08 8132 6400.